Monday, July 23, 2007

Ways That we Tend to Overspend

What triggers overspending? How do we avoid all these ways of spending more then we intended? I think the number one way is to plan ahead for situations you think you might overspend.

First, the number one way that people overspend is when they are bored. When you’re bored one option that comes to mind is shopping. “I’m bored; why not go buy something to take away my boredom.”
  • Plan ahead> Before you get bored think of alternatives to shopping. Keep a running list of things to do instead that are cheap or free that you enjoy doing.

Second, people overspend when they are around friends. No matter what the case may be when we’re around friends having a good time money is no longer an object. You just basically get swept up in the commotions and fun of things that you don’t even think twice about how much something costs. You just swipe your card or hand over a couple bills.

  • Plan ahead> When you know you're going to be around friends bring cash only. Leave your c.c. at home to avoid those temptations of "unconscious swiping." Also, before hanging out with friends plan ahead what you'll be doing. Think about cheaper alternatives then an expensive night out.

Third, we overspend on gift giving. When shopping for a gift it's hard to stay on a budgeted amount because what if you can’t think of anything in that price range? Most often then not we overspend because we found the perfect gift that just happens to be a little more. Plus, our friends and family are worth it. Birthdays and holidays only come once a year so why not splurge a little.

  • Plan ahead> Shop for gifts throughout the year. If not physically, do it on paper. Keep a list of friends and families birthdays and other occasions that you have coming up that you'll be buying a gift for. Write down ideas as you come across them. This way you are not stuck at the last minute trying to think of what to get and end up overspending.

Fourth, I’m starving and there is no food in sight. Take me to the nearest restaurant fast! Overspend.

  • Plan ahead> A real life saver can be to have snacks in your car. When you're running errands and doing other things that require a lot of hurried thinking you will get hungry fast. Always bring a snack even if you think you won't get hungry. You can also plan your route ahead of time to make it home around the times you get hungry.

Firth, we overspend when we don’t use cash. This has been said many of times that it’s harder to hand over your hard earn cash then to swipe a piece of plastic.

  • Plan ahead> Pretty self explanatory. Try to carry cash on you when you're buying something. You can also keep a list of things you need when going out so you stick to it.

Sixth, not planning ahead causes overspending as well. Just a small example: when you have to run out to the liquor store to buy milk after it runs out you'll probably pay a higher price because you didn't buy it at the grocery store.

  • Plan ahead> I think this one sums up a lot of our overspending. Most of the time try to plan ahead. I know that won't always be the case so be prepared for some days when you just didn't think ahead about the things you need.

There are probably thousands of more ways that we overspend. What ways do you overspend or see others overspending? How would you overcome that temptation?

Thursday, July 19, 2007

Saving for a Down Payment on a Home

For me it's been up and down over the years trying to save for a home. I'm sure it is for many people. Most families get into a house by either inheriting the money or the house. For those that have to save for the down payment on a home it can be quite trying. I've used our home savings as an emergency stash plenty of times. How does a family save for home on a small income?

I've had money automatically taken out of our paychecks every month and put into an ING savings account. It usually generates about a 4.5% interest rate. My biggest weakness is that it can take years and years before we can see real results in savings. I'm going to take this process a step further in order to save up this big chunk of money.

# 1 is to figure out a time frame in which you would like to have the money accumulated. Since I get distracted easily I’m shooting for 5 years, tops.

# 2 Get the entire family involved, even the kids. Sit down and motivate everyone about the idea of having your own home. What does each one want? Their own bedroom, backyard, dishwasher, garage, etc. Write down all the features that each one dreams of having.

# 3 Think about and discuss what area you want to live and the price ranges you are looking to get into.

# 4 Once the entire family has agreed on what they want in a home, the area, price range, and time frame write out a specific goal of that. For example: "We are going to save for a down payment on a 3 bedroom, 2 bathroom single family home with a 2 car garage in the Los Angeles area by January 2012." Type it up nice and big and even draw a picture of the type of home. Post this goal on your fridge or any area that the family goes by everyday.

# 5 Think about how you are going to achieve this goal and start writing down ideas. Become frugal, always be thinking of ways to do things cheaper or even for free. Lower your living expenses as much as possible to save the maximum. When you get a raise or bonus put at least half if not all towards the house savings. Same goes with money gifts.

# 6 Set rewards for yourself along the way. When lowering your living expenses one of the first things to go can be expensive entertainment that kids where used to like amusement parks, Chuck E Cheese, and things like that. Each month when your savings goals are achieved award the whole family with cheaper entertainment. At the beginning of the month think about what your reward will be and shoot for it.

# 7 Families with children usually get a big tax return in January-March. Take half that money and put it into your house savings every year.

# 8 Every year you will be saving up your money by having it transferred into a savings account-try to find the highest interest paying account you can find, most of these will be online. Add this money up with your tax return and put it all into a one year CD earning more then 5% interest. Make sure the CD is started right when you receive your tax return so that it becomes mature at that time the next year. You will continue adding your savings from the year past and your tax return money and opening up a new CD.

# 9 Essentially you are creating your down payment with compound interest. The interest you earn will be doubling each year because you are adding such a big chunk of money to your CD each time. You will see the savings add up fast, which will in return motivate your family even more!

# 10 Share in the progress with the entire family along the way. Let everyone know you are 15% towards your goal and so on.

Tuesday, July 17, 2007

Free Organizing Ideas

Organizing your household is a pretty big chore. It can also cost a lot of money! Most organizing of stuff takes "special" boxes, bins, containers etc. When I decided to become frugal I cleaned out my entire house and got rid of everything I no longer needed cluttering up my space.

The stuff I did keep, I wanted to organize but didn't want to spend any money doing it. I started looking around and realized there are hundreds of free possibilities for organizing. This is what I came up:

1. Bread tabs can be used for dividers in filing or use the tabs for marking electrical cords like VCR, DVD, TV to easily find which one to unplug
2. Boxes painted, with stickers, paper, etc. for organizing stuff
3. Glass jars for organizing small items (toys, hair ties)
4. Plastic containers from food (paint them)
5. Boxes from different food products
6. Plastic bags can be used for storing blankets or towels
7. Film canisters for little things like paper clips and tacks
8. 6 pack glass bottle boxes for pens, pencils, scissors, etc.
9. Toilet paper rolls for extension cords
10. Lay a mac n cheese box down and cut off one side, put in drawers for organizing office stuff or kitchen stuff.
11. Cut cereal boxes to make magazine holders
12. Cans for holding pens & pencils
13. Use a piece of cardboard for a bulletin board
14. Pill bottles for paper clips
15. Shoe boxes for socks, gloves, or anything else
16. Bubble wrap for delicate items. Put in the bottom of a box before putting stuff in.
17. Put grocery bags in a Kleenex box
18. Paper towel rolls: roll up table clothes or fabric on them.
19. Put bills and mail in a napkin holder
20. Use a clean dust pan to pick up toys like legos
21. Use a clean pizza box under the couch with coloring books
22. Egg cartons for organizing desk drawers
23. Coffee cans
24. Line 15 toilet paper rolls in a tissue box for organizing pens, markers, etc.
25. Berry baskets like the ones strawberries come in-put a suction cup on one and hang in the bathtub to hold soap.
26. Berry basket-hang and put screwdrivers through the holes
27. Berry basket-to hold seasoning mixes
28. Use the boxes that checks come in to hold things
29. Cut off the top of a 2 litter bottle to store tools, toys, or anything.
30. Use cat food or tuna cans stacked up with stuff inside them
31. Use any kind of can
32. Use the plastic mold that comes in cookies for organizing drawers
33. Pringle cans to hold large utensils like spatulas, soup spoons, etc.
34. Muffin pans to organize jewelry or even kids toys

Friday, July 13, 2007

8 Interesting Things About Myself

I've been reading all the interesting things that others have posted about themselves and have now been tagged by Millionaire Mommy Next Door to do the same. This is a project going through the PF Blogs asking that we share 8 personal facts about ourselves.

The Rules:
1. Each player must post these rules first.
2. Each player starts with eight random facts/habits about themselves.
3. People who are tagged need to write their own blog about their eight things and post these rules.
4. At the end of your blog, you need to choose eight people to get tagged and list their names.
Don’t forget to leave them a comment telling them they’re tagged, and to read your blog.

8 Interesting things about myself or not so interesting ;-)

1. I type about 85 words per minute but make a lot of mistakes.

2. I usually only read half of every book I have because I get bored easily.

3. In 4th grade I got an award for the best posture in the class, what's that?

4. I have a hard time cleaning my own house but I clean my Mom's all the time.

5. I lived in Mesa, Arizona for about 10 years. I now live in California and plan to stay here!

6. I used to spend my money like it was going out of style and I had nothing to show for it. I now save 20% of my income every month.

7. I'm happier making less money and thinking of ways to save here and there by being frugal.

8. I love to eat ice cream cones!

The 8 bloggers that I tag are:

Journey 2 Retirement
Stop Spending and Start Saving
Stop Buying Crap
Saving Advice
Wise Bread
Binary Dollar
Blunt Money

If you have already been choosen you can ignore :)

Savings Tip # 4

Save all your receipts. This will save you money big time. When we go shopping we tend to buy things we don't necessary need or end up not even using. When you get home from the store or even a few days after, go through the stuff that you bought and see if you have actually used it. If you haven't then why not take it back to get your money? I threw a party a couple months ago and in the end realized I had too many party supplies. I just took them right back to the store instead of throwing them in a box to collect dust.

Yet Another Way to Rent Movies-Cheaper

I just rented from the new DVD kiosk we have at our local Von's store. It was one of the easiest ways to rent a movie!
I really enjoy watching movies. I used to go to the theater a lot. Then I started renting movies. I would rent from Hollywood Video every week. I knew I was saving money compared to movie theaters but the problem was I was still spending on average $20 each time I rented. I brought my son along and he would get some candy with the movie and I would end up getting a soda. We added two movies and probably a game rental each time. We were spending about $80 a month just to rent a couple movies.
Once I heard about Blockbuster Online I looked into the cost and figured it might be a better deal. I signed up and the first month I got tons of movies for a great price. I pay about $16 a month. What I get are two movies in the mail as well as free trade in. They just added this bonus as well, you can trade in a movie for a video game at a cheaper price for $4.99 instead of the regular $7.99. Plus you get a free movie or game rental coupon to use in-store. I average about 16 movies a month plus another free rental for $16 a month. That's pretty good at $1 a movie. I rent two movies online for the weekend and then trade them in on Sunday night to watch over the week. I noticed that we didn't really watch the ones over the weekdays as much so I changed our plan to one movie rental out at a time. That's still a great deal for only $11 a month and being able to trade them in store for free.
So today I tried yet another option movie renters now have which is a "movie kiosk." You can rent movies out of a machine! That's pretty cool and very convenient. I was taking my son over to my mom's today and thought it would be fun for him to watch movies while he's there. The video stores are not open and we only have a scary movie from Blockbuster so how easy would it be to stop at the machine on the way there?
I walked in, picked two movies and slid my ATM card. Done.
They stock the machines every Tuesday with the latest rentals. It costs $1.49 for each rental, per day. As long as you turn them in the day after before midnight you are getting a new released movie for $1.49. That's probably the best deal considering we might not always rent enough with Blockbuster.
These machines seem to be well stocked with movies. I'm sure most people turn them in right away considering their credit card is on file to be charged each and everyday. So check it out. They are popping up all over the place. The one I used is DVD Play. You can look up DVD Kiosks to find others too. Check it out, saves big on entertainment for the whole family!

Thursday, July 12, 2007

Starbucks Coffee Drinks practically Free

I love Starbucks. I used to go there all the time to get flavored drinks. But now that I'm trying to be financially responsible by not "blowing" my money on unnecessary things, I cut Starbucks completely out of my life. The horror! The agony! The pain! I have never been so deprived in all my life.

Luckily, I found out how to make my own Starbucks for free at home. For Christmas I always tell others that I want flavored coffee additives like caramel, vanilla, amaretto, and chocolate. They usually come in a nice Christmas package but you can probably find them throughout the year.
Cheap Starbucks Drinks

I just brew some coffee the night before and pour into a jar. (A free jar that I've saved from olives or something) They sell Starbucks coffee at the grocery store which I’m sure you can use but I just use my favorite coffee and it tastes fine. I put the jar of coffee into the fridge before I go to bed.

The next morning:

1. Pull out my jar, pour into a tall glass
2. Add the coffee flavor of my choice
3. If using chocolate syrup, squirt it around the sides of the cup before pouring liquids into
cup-distributes easier.
4. Fill the rest with milk
5. Optional: To make it taste as sweet as Starbucks just add one packet of semi-sweet sugar

Why spend tons of money on Starbucks when you can make these sweet drinks at home for pennies? It's simple to turn them into blended drinks, all you have to do is add ice and put in a blender.

For Christmas we always have lots of mints lying around. I just add about three to the blender and have a seasonal drink. I would have spent about $5.00 on each of these drinks at Starbucks almost everyday of the Christmas Holiday. I absolutely love Blended Mocha Mint drinks!

Try experimenting and see what you can come up with. You will see how easy it is to save your money and still have Starbucks everyday!

Wednesday, July 11, 2007

Cheap Shopping Spree-Have Fun!

When you start the frugal lifestyle and want to save more money it can get hard at times. Especially for those that love to shop. So the way I cure the lack of shopping is going on a shopping spree at the dollar store. I love the Dollar Tree. They have so many great products for $1. All you have to do is take about $20 and just buy whatever you feel like. Fill up that shopping cart if you feel like. Buy stuff you want but wouldn't normally buy. You deserve to have fun with your money once in awhile right? :) Take along the kids too and give them each $2-3. They will have so much fun too!

What would you buy on your shopping spree?

I would buy sunglasses, water toys, candles, notebooks, snacks, bubble bath, and lotions.

Monday, July 9, 2007

Pursuit of Happiness

I know the movie, “Pursuit of Happiness” has been out for quite some time but I just recently watched it this weekend. I think it’s a must see for all those saving money and living a frugal lifestyle. This is a very touching and powerful movie. After watching, my husband and I looked around and said, “We truly are ‘rich’ with our living situation.”

We live in a very small apartment. Mostly by choice but also because we live in California. California sure is expensive and the cost of living just keeps going up while our income does not. Our apartment has one bedroom, one bath, small living room, kitchen, and out of nowhere a large walk-in closet. There are three of us in our family, myself, my husband and my 7 year old son. We all share the bedroom. It’s a very cozy living space.

One of our main goals is to see how little we can live off of to get by comfortably. Once seeing the Pursuit of Happiness, we realized that we are living really comfortable. The father in the movie struggles every day to provide for his son. Each and every morning he wakes up, he is not certain of what he will do for money or where the two will sleep that night. At one point he only has $22 to his name and no hope of income in sight.

It just makes me think of how much more we could do without to live simpler and cheaper. I would like to know that no matter what, our family can survive on a very small income and still be happy. I see big things for us in the future but being young I’d like our family to learn this valuable lesson.

I have taken huge advantage of spending money frivolously. There was a point in time when the three of us had to live at my parent’s house because I lost my job. I took full advantage of not having any bills. I spent my money on anything and everything I wanted. I didn’t save much except for just enough to get into another apartment. I can just imagine if I was smarter I would have saved so much more money at that time.

Pursuit of Happiness is also about following your dreams and making them come true no matter how hard the circumstances may be. I would really like to create goals and dreams that my family can follow in the next couple of years. # 1 being to save for a house.

I think there are so many ways to cut living expenses and save more. I'm going to spend this month trying to do just that. How little can a family live on? Well, in the movie the father and son did get by on $22 by utilizing free resources such as shelters. We are so blessed that we are able to take care of our son and make him feel safe in a nice comfortable environment.

Friday, July 6, 2007

Cheaper Alternatives

I'm always trying to think of cheaper alternatives for the things we need or want. I really thought a lot about getting a DVR because we are busy and would rather watch shows at our leisure.

I called our cable company to look into the costs and it was extremely high. We couldn't just add a DVR for the monthly rate, we also had to upgrade our cable package. That would have been a ridiculous amount just to be able record a couple shows that we enjoy watching.

I began thinking of a cheaper alternative and it dawned on me that we still have a good 'ol VCR way up in the top of the closet. I brought it down and hooked it up. I programmed the VCR to record the shows we wanted. It was so easy and absolutely FREE! And the VCR tapes were donated to us because my parents didn't need them.

So, you really can have the things you want or think you need just by thinking of cheaper alternatives. We use the VCR all the time to record. The playback is not as crisp as a DVR but does that really matter? I'd rather save the money. :-)

Thursday, July 5, 2007

Savings Tip # 3

In these VERY hot months I'm sure we all have to use our air conditioners in our car. That eats up a lot of our gas money. I try so hard not to use mine and just roll down the windows but it's still way too hot. Another way to save on gas money is to run errands during the evening hours. It's cooler outside so you don't have to run the air and most businesses are opened later to accommodate full-time workers.

Tuesday, July 3, 2007

Falling Off the Frugal Wagon

What do you do when you hit a point where you spend a lot of money out of nessesity or even out of fun and fall off the frugal wagon for a bit?

I live frugal almost everyday. I try cutting costs everywhere I can but there are just some days that I end up spending more money that I wish I would have. One of my biggest weaknesses is spending money on entertainment and just fun stuff that I like to have. It's hard to be disciplined all the time. But I always vow to get right back on track. The only way I've really learned to do that is by putting my debit card in a hiding space for a week. Then I make up my own savings challenge for the month. I try to beat how much I saved last month.

How do you get back on track to saving money? What helps you stay motivated and focused when there are so many things we could spend money on?